Pre-Foreclosure Lien Acquisition in New Jersey

[Christopher Wraback]

Hey BP!

About a year and a half ago I started a real estate investment management firm and most of my business was in the foreclosure realm. As my business evolved, I started another company that helps homeowners out of foreclosure in several ways, where I explain all their options and advise them on what is in their best interest. I assist them throughout the whole foreclosure process with foreclosure, legal (the attorney I work with conveys this advice), financial, and credit advice.

Recently, an attorney friend of mine was telling me about a client of his that was in foreclosure where the homeowner was making payments on time for the first mortgage, but she couldn't make payments on the second mortgage. Thus, the second mortgagor filed for foreclosure on the house. My attorney friend asked me if I have ever bought a junior lien to which my response was no, but I would definitely be interested.

My goal would be to buy both the junior and primary liens and re-arrange the financing so that it was all consolidated into one payment at a lower interest rate to me, in which then I would sell the note to a lender or help her refi out of the loan payment to myself into a loan payment to another lender.

My questions for anyone (preferably if there is an attorney out there with experience in this space) are:

1. How do I pay off the liens without obtaining ownership in the property?

2. How do I place a lien on a property after paying off the liens?

3. Am I able to sell the note to a lender or a third party and if so, how?

This is also pertaining to New Jersey law.

Thanks to all and looking forward to a great conversation!